Question

Year	Nominal GDP (billions of current $)	Inflation rate	Population (millions)
2014	3754	2%	212
2015	3898	3%	216
2016	3919	1%	220

Using the information in the table above, calculate economic growth for 2015.  Give your answer to two decimal places.

Answer 1

Given,

Year	Nominal GDP	Inflation rate	Population	Real GDP per Capita	Economic growth(Per capita)	Economic growth
2014	3754	2%	212	17.36
2015	3898	3%	216	17.52	0.92%	2.83%
2016	3919	1%	220	17.63

Using formula,

Real GDP per capita =  

Real GDP₂₀₁₄ per capita = (3754/(1+0.02))/212 = 17.36

Real GDP₂₀₁₅ per capita = 17.52

Real GDP₂₀₁₆ per capita = 17.63

Economic growth₂₀₁₅ per capita= (17.52 - 17.36)/17.36 = 0.92%

Else Economic growth,

Real GDP₂₀₁₄ = 3754/(1+0.02) = 3680.40

Real GDP₂₀₁₅ = 3784.47

Real GDP₂₀₁₆ = 3880.20

Economic growth₂₀₁₅ = (3784.47 - 3680.40)/3680.40 = 2.83%